NZD/USD subsides from daily highs near 0.7100 amid USD strength

• NZD/USD surrenders the previous two session’s gains on Friday
• US dollar stands tall above 92.30 ahead of key data.
• Risk aversion among investors turns Kiwi lower against the US dollar.

The appreciative move in the US dollar keeps NZD/USD edgy in the Asian session on Friday. The pair confides in a narrow trade band with a negative outlook.

The buying pressure in the US Dollar Index (DXY), which measures the greenback performance against its six major rivals, drags NZD/USD toward lower levels. The DXY trades steady above 92.30 amid an uptick in US Treasury yields.

The US Initial Jobless Claims fell in line with market expectations in July, which signaled the labor market recovery was  as per the Fed’s target. The data came at 385k, aligned with the market consensus of 384k.

Investors remain cautious about the concern on rising Delta variant COVID-19 infections. Increasing corona cases in the Asia-Pacific region underpins the demand of the US dollar on the back of its global safe haven asset.

On the other hand, Kiwi lost its ground as risk appetite worsened due to increasing COVID-19 cases in neighbouring countries as investors feared that it could derail the global economic recovery. The concerns were mounting over an outbreak in new cases despite managed isolation in Auckland.
As per the Misinsty of Health, there were two COVID-19 positive patients in Auckland hospitals.

It is worth noting that S&P 500 Futures were trading at 4,419  with 0.05% losses.

As for now, traders are waiting for the US Nonfarm Payroll data to take fresh trading impetus.